HELOC & Home Equity Calculator
See how much you can borrow against your home, what a draw would cost each month, and how the interest-only draw-period payment compares to a fully amortizing one — before you ever talk to a lender.
How the numbers are calculated
Your borrowing power on a HELOC starts with combined loan-to-value (CLTV) — the total of all loans against the home divided by its value. Most lenders cap CLTV somewhere between 80% and 90%, so your available line is roughly:
- Available equity = (home value × max CLTV) − current mortgage balance. If that comes out negative, you have no borrowable equity at that CLTV.
- Interest-only payment = drawn balance × annual rate ÷ 12. This mirrors the typical minimum during the draw period, when you're charged only on what you've actually borrowed.
- Fully amortizing payment = the level monthly payment that pays the draw to zero over your repayment term at the quoted rate — what you'll likely face once the draw period ends.
- Total interest = the amortizing payment × months − the amount drawn.
The gap between the interest-only figure and the amortizing payment is the payment shock many borrowers hit when a HELOC moves from its draw period into repayment. Sizing that gap now is the whole point of running the numbers before you borrow.
HELOC FAQs
A HELOC is a revolving line you draw from as needed, usually at a variable rate, with interest-only minimums during the draw period — best for flexible or ongoing costs like a phased renovation. A home equity loan hands you a fixed lump sum at a fixed rate with predictable payments — best when you know the exact amount you need and want a set payoff date. See our full HELOC vs. home equity loan vs. cash-out refi comparison.
Almost anything — renovations, consolidating higher-rate debt, tuition, medical bills, or an emergency cushion. Because it's secured by your home, the rate is typically lower than credit cards or personal loans. The catch is the collateral: using cheap, home-secured money for depreciating purchases or routine spending puts your house at risk for things that don't build value.
During the draw period (often around 10 years) you can borrow and repay freely, and your required minimum is usually interest-only on the balance you've drawn. When that period ends, the line enters repayment and the payment jumps to cover principal plus interest. Paying more than the interest-only minimum while you can softens that later jump.
Generally only when the money is used to buy, build, or substantially improve the home securing the loan, and within overall mortgage-debt limits. Interest on funds used for other purposes — consolidating debt, a car, tuition — is typically not deductible. Tax rules change and hinge on your specifics, so confirm with a tax professional before counting on a deduction.